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This Internet of Things (IoT) continues to expand its reach, to the point where we find device-to-device communication and automation capabilities in products as diverse as home thermostats, ovens, refrigerators and even cars. It has already been shown to save global commercial transportation asset and operations management nearly $5.6 billion per year. But what role will the IoT play when it comes to warehouse management solutions?

A Growing Market

A recent Research and Markets report predicts that the value of global IoT in warehouse management market is anticipated to reach $19.06 billion by 2025. Driven by the increasing adoption of Goods-to-Person (GTP) technology in warehouses, the integration of fleet management services, cloud-based platform growth and innovations in data transmission and functionality, warehouse managers may soon find IoT to be the norm, rather than a technological outlier.

In particular, retailers seem to the ones most anxious to embrace the power of IoT. According to the Zebra Technology Corp “2017 Retail Vision Study,” a survey of nearly 1,700 retail decision makers worldwide, almost 70 percent of retail decision makers claimed they were ready to adopt IoT, and 65% plan to invest in automation technologies for inventory management and planogram compliance by 2021.

“A lot of retailers are looking to use the store’s back room as a warehouse for fulfillment,” said Tom Moore, Zebra’s industry lead for the retail & hospitality industry. “Retailers are looking to leverage their footprint and use their real estate in the store to play in the e-commerce world.”

How is IoT Being Used

This insight begs the question: How do retailers think that IoT will help their bottom line and better manage warehouse space? While talk of automation and IoT brings to mind the image of robots in warehouses, the truth may be more subtle.

At the core of the value proposition for IoT is the wealth of data that it aggregates. Strictly by virtue of the fact this industrial internet is, on some level, an autonomous system, inventory accuracy is possible on a level that was previously unthinkable.

When it comes to warehouse management one of the major ongoing and traditional challenges has always been inventory management. Matching the goods sold in online orders with what exists on the warehouse shelves is tricky enough without having to often juggle two distinct and fundamentally incompatible inventory management systems. Add in shrink, data input errors and lack of tracking capabilities and what you get is a warehouse management system with significant blind spots – blind spots that lead to lost or damaged goods.

With IoT, many of these issues are mitigated. Different systems can communicate with each other and share inventory lists. The Zebra survey showed that 79 percent of retailers were looking to invest in IoT-enabling technology such as automated inventory verification systems and sensors on shelves by 2021. This would mean no manual counting or scanning – as soon as an item leaves the shelf, it absence is registered in a centralized inventory.

This kind of intercommunication between what have previously acted as disparate systems could optimize the supply chain and streamline operations significantly. Point-of-sale data can be combined with manufacturing and warehouse data, creating a better service experience, faster order fulfillment and – vitally – giving manufacturers and retailers more insight into the kind of products consumers buy and the respective fulfillment challenges.

The ‘Smart’ Warehouse

This intercommunication method – combined with increased automation – means that a new kind of warehouse is on its way. Just like “smart homes” embrace IoT to control temperature and security measures, “smart warehouses” will have advanced warehouse management solutions woven directly into their operations – all without needing direct human intervention.

Imagine a warehouse that could automatically adjust temperature to protect temperature sensitive goods. If light will discolor or damage product, the warehouse “knows” to dim the lights. Alternatively, if the warehouse “senses” the presence of unauthorized personnel, it can initiate lockdown. This kind of real-time, faster-than-human automation is poised to revolutionize the warehouse management industry.

Data Challenges of IoT

This is not to say that IoT is without its flaws. The technology is still being refined and is largely in its infancy. This means that there are several distinct challenges that any warehouse management solution relying on IoT must face.

The first is data quality. The scope and breadth of the data gathered by IoT makes it hard to ever really know if your data is accurate. A recent RT Insight survey revealed that, of the 314 data professionals polled, 68% of respondents said data quality was their most common challenge – yet only 34% felt confident they could detect divergent data.

“The industry has long been fixated on managing data at rest and this myopia creates a real risk for enterprises as they attempt to harness big and fast data,” said Girish Pancha, CEO of StreamSets.

After quality, the challenge can become analytics and insight. Even with 100% accurate data, the sheer volume of it combined with the granular nature may make it tiresome for warehouse managers to review in full. Not every small change in temperature, vibration or pressure is going to imply a larger issue.

To battle this, automation must perform an analysis of the date and be set to a particular threshold – effectively “predicting” what changes are serious and what are not. More serious changes can trigger an alert, while less serious fluctuations may simply be logged for later review.

The Warehouses of the Future

As IoT continues to filter into warehouse management solutions, the warehouse of the future continues to take shape. This is inevitable: as more and more commerce is conducted online, it simply makes sense to have warehouse management integrated into larger technological network.

Warehouse workers may soon glean insight from automatically generated reports, delivered directly to tablets. They can be alerted to a breakdown in the supply chain by their smartwatch. The goal is to harness the capabilities of this technology, integrate it steadily while being realistic about the current challenges.